| Questions and Answers Regarding The New Rates
Q. Why is WRS adjusting my rates?
A. The rates are being adjusted to help the utility meet operating needs, maintain good financial standing and preserve its bond rating.
The downturn in the economy and increased water restrictions because of three years of drought have significantly impacted utilities across our region, including Water Resource Services. Simply put, our customers are buying less water, even as expenses for the utility – just as your expenses at home – have risen. WRS has responded by streamlining operations, reducing the size of its workforce, deferring certain construction projects and more – saving $11.8 million a year – but unfortunately, not enough to avoid a rate adjustment.
Q. Why is the utility concerned about its bond rating?
A. Bond ratings are a lot like your personal credit score. The better our credit rating, the less interest the utility pays on money borrowed to pay for necessary capital improvements, such as expanding and upgrading existing plants, or building new facilities as needed. If WRS does not take action to keep the utility in good financial standing, bond agencies could lower our credit ratings, leading to millions of dollars more in additional interest. That in turn would lead to even larger rate increases for customers.
Q. What is rate indexing?
A. An independent financial company recommended indexing as a tool for WRS to set its rates to keep up with inflation. Rate adjustments can be made only once per calendar year, and will be tied to a factor set by the Florida Public Service Commission. Although WRS is not regulated by this authority, their standards are specific to Florida utilities. This makes their inflation factor more applicable to WRS, unlike the Consumer Price Index, which incorporates a wide variety of commodities.
Q. What rates are affected?
A. The amounts paid for water, sewer and metered reclaimed water service. The system of tiered rates – where higher water users pay more – will continue. The indexing will not affect reclaimed water customers who pay a fixed monthly amount already set by a formal agreement with the county.
Q. Will the rates go up every year?
A. Only if the utility’s revenues do not meet a certain threshold. The indexing plan approved by the County Commission allows for WRS to begin charging the adjusted rates on billable usage beginning Oct. 1, then automatically on June 1 of each year if adjustments are necessary.
Q. Are other utilities raising their rates?
A. Yes, many utilities in neighboring counties and cities raised rates last year, and/or are doing so this year, including the City of Tampa, Pasco County and Polk County.
Q. What is the “Purchased-Water Pass-Through Charge” on my bill?
A. This portion of the bill refers to the cost of water purchased by WRS from other sources.
Hillsborough County does not own any drinking water sources, such as wellfields or reservoirs. Nearly all of the drinking water we provide to our customers is purchased from Tampa Bay Water, the regional wholesale water supplier that serves six member governments. Depending on where you live, you may also be drinking water we buy from the cities of Tampa, Temple Terrace or Plant City.
The cost of this purchased water is paid by our customers through the “pass-through” charge, which is averaged and calculated annually. Every customer pays the same rate, and WRS does not make a profit on the charge.
Q. What is the new rate for the pass-through charge?
A. Beginning this month, the rate is $2.43 per 1,000 gallons of water, an increase of 18 cents.
Q. What reclaimed water rates are impacted by the rate indexing?
A. The indexing applies to metered reclaimed water rates, that is, for those customers who pay for the actual amount of reclaimed water they use every month. The indexing does not impact customers who are charged a fixed monthly rate.
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